The Colorado Mary Jane Facade

Folks may not have been paying much attention to the details of the recent Colorado marijuana legalization events so here are some facts that could put a damper on ideas about the brave new world out there.

One giant gapping hole in this is that you can still get busted for selling pot. The illegal sales and production market will remain very attractive and will only become more so as taxes rise over time.

The economics of the legal pot industry seem simple. Make it legal, tax it and let supply-and-demand take over. Soon enough, illegal drug trade should dwindle and state tax coffers should be filled. In the real world, it’s not that simple. In Colorado, for example, where the commercial production and sale of recreational marijuana is now legal, the cost per ounce of high grade pot from a retail outlet is now more than double what it costs from an illegal drug dealer. Why? You guessed it. Tax.

Truth is that any moron could have predicted the continued black market and out of state import of marijuana to undercut high state approved marijuana prices. In short folks are still going to go to jail for illegal sales. The argument that the "cartels" wont be getting the profits if pot goes legal is just a matter of how high the taxes get and/or how deep the other sources are willing cut their own profits. But it doesn't look like they will even have to consider it. Heck the price of state approved MJ may tax the thing right out of the legal market even for the driven snow nouveau hippie users that fancy the notion that they will be helping the schools and community by buying legal.

Once you get past the initial shock of reading a word problem about marijuana growers on a government tax site, the next reaction is how complicated this business is! Once you do the math, this tax equation means that a $30 eighth ounce of marijuana will have about $8.59 in taxes appended to it. In other words, a 29% tax rate.

About 30% tax Joe smoker will be paying! Who couldn't work around that? The illegal industry is already in place and has been for decades and its not going to stop. Not to mention that the state can now double dip! At some point the state may be forced to redirect that tax money to the prison system which will be full of free market radicals. LOL

All that has been done in Colorado is to allow those that need to and can afford it to smoke "clean" without the worry of consequences from breaking the law and cater to there notions of helping out with the state budget and schools.

There are some very real obstacles standing between Colorado and their revenue goal. According to NBC News, retailers in Colorado have been selling top-shelf marijuana at close to $400 an ounce. For some perspective, that’s about twice the price of medical marijuana. On the black market, an ounce of high-grade marijuana sells for about $237 in Colorado, according to priceofweed.com, a site that bills itself as the “global price index for marijuana.”

Forbes

Yea the most logical location for dealers to get there supply would be in the center of the u.s. Put it in the middle and then it will branch out into illegal states.

Careful with all the facts and analyzing. There are many here on ATS who think what's going on in Colorado is the birth of a new and shiny universe. All laws of economics and the demonstrated history of mans ability to screw things up are now officially out the window.

a reply to: ABNARTY


It simply looks like some have decided to get taxed to death in lieu of the alternative. They are simply paying a state fee of 30% for the consideration. Some real free birds out there.

So you're saying lets leave it to ONLY the black market? If not then what's your alternative?

a reply to: rockintitz

Well I am pointing out that a great deal of myth....by fact deletion and giddiness is being perpetuated. Just pointing out the running BS behind this.

Its important that we notice how things are sold to the public for justification and approval. We need to guard ourselves from being dupes.

Heres a fact.....the state has already encouraged and insured the black market will thrive simply by taxing "approved" pot to the point of its current cost. The police will still be arresting unlicensed sellers and their patrons. The state is now an official player in the market, a market that they did not create, for the sake of profit.

Problem with your theory is that its cheaper in stores.

Its all about the tomato model.

a reply to: Logarock

I live in Denver. Cops don't care anymore. They don't ask where you got it, who sold it to you, nothing. They won't even look to see if you have more than the legal limit.

I think more freedom to choose is always the best answer. Nobody said it would be perfect, but it's a lot better than it was before.

a reply to: Logarock

I'll take it a step further and say the "State" has always been in that market to some degree anyway. Only in the past part of it was hidden from public view. Now they get to openly play in the market from the Legal side as well as the Illegal side.

What was "Promised" can still be true if they just wanted it to be, but there are too many Big Players who have influence already and they don't want to lose their shares.

I'm curious, just wtf makes up that tax of 30%? Just how many different ways can you possibly tax something??? I guess all those Corporate Tax cuts can't be applied anywhere either???

It's a plant, a weed, it's not like it has to be manufactured.
Ever heard of homegrown?

Colorado has provisions for that....


www.mintpressnews.com...

originally posted by: captaintyinknots
Problem with your theory is that its cheaper in stores.

Its all about the tomato model.

It is most definitely not cheaper in dispensaries. Double, at least.

originally posted by: olaru12
It's a plant, a weed, it's not like it has to be manufactured.
Ever heard of homegrown?

That's how I'd do it too. But there are a lot of weed snobs out there who won't even touch it if it isn't the absolute best. So I guess let them pay the high prices for something I'll grow myself that is almost just as good at a fraction of the price.

a reply to: Logarock

So what about the cost of housing offenders? The millions of dollars that we spend per state to arrest, process, and then guard these offenders 24/7, not to mention parole / probation, rehab, etc, they are all in this equation. Not just the money from sale, you need to consider the money saved. Just my .02

originally posted by: rockintitz

originally posted by: captaintyinknots
Problem with your theory is that its cheaper in stores.

Its all about the tomato model.

It is most definitely not cheaper in dispensaries. Double, at least.

not sure where you are going, but in Oregon it is FAR cheaper at the dispensary. Far cheaper.

$10per gram in Colorado on average. Cheaper than street retail.

a reply to: captaintyinknots

You will not find a recreational dispensary in colorado that will sell you a gram for ten dollars. 13 bucks will get you the low-grade.
I'm not saying that's the price for everyone, just recreational buyers that don't have a card.

Taxes taxes taxes.

originally posted by: rockintitz
a reply to: captaintyinknots

You will not find a recreational dispensary in colorado that will sell you a gram for ten dollars. 13 bucks will get you the low-grade.
I'm not saying that's the price for everyone, just recreational buyers that don't have a card.

Taxes taxes taxes.

that's interesting. My experience has differed.

a reply to: captaintyinknots

Well it's all medical in Oregon, isn't it? The huge amount of taxes we have in colorado are only from recreational sales.. At least I'm pretty sure..

originally posted by: rockintitz
a reply to: captaintyinknots

Well it's all medical in Oregon, isn't it? The huge amount of taxes we have in colorado are only from recreational sales.. At least I'm pretty sure..

youre correct, however, ive had experience in colorado as well.

Either way, once again, I am avfirm advocate of the tomato model.

Um well, no, I don't think you're reporting this correctly. The truth is, recreational MJ is taxed higher than medical MJ, so most everyone who used to have to get it from the black market, still get it from the medical MJ establishments, which are located on like every 3 city blocks. There are still more medical MJ establishments than 7-11's! (it seems like at least, they really are everywhere) Those who can afford it and don't want to bother "qualifying" for medical, go for the recreational places which have done very well so far.

If, for some reason people still cannot afford medical MJ, (which is very affordable) they just get it even cheaper from someone who does get it from a medical dispensary. Very few people get MJ from the black market in Colorado anymore. I really wish stupid lies against this would stop being told.

I've said this time and time again, and contrary to what my avatar may make people believe, I don't smoke the stuff, I don't like the effects. However, I know tons of people here who do. I don't judge, I don't care what they do with their lives, and I think people need to get over it. The people made this choice, that's America working as intended.

a reply to: captaintyinknots

In the tomato model though, every farmer pays taxes. We're not there yet with marijuana.

ETA: I'd love to see a weed farmers market.